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Management wants to determine some plans of action in several areas of the company to improve efficiency and overall value. The following ratios were observed:

Company Industry Average

Current Ratio 1.6 2.6

Net Profit Margin 6.5% 6.5%

Average Collection Period(ACP) 44 days 30 days

Total Asset Turnover 5.0 X 7.5 X

Debt Ratio 20% 40%

a) In which category of ratios does each of the ratios belong? Examples of a category of ratios is Liquidity, Activity, and so on.

b) For each category in part a, discuss the financial strength/weakness AND include some possible management action.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92820340

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